For two centuries, London has reigned as the financial capital of Europe. Now, that supremacy is being challenged by European politicians who question why so much business and trading in the euro is done in a country that does not even use the currency, The New York Times DealBook blog reported. These policy makers are proposing changes that could shift power from the British capital to its longtime rivals, Frankfurt and Paris.

A banking union will help the euro zone resolve its debt crisis but Britain must obtain safeguards to avoid its banks being damaged by a too-powerful European Central Bank, a Peers report said, Reuters reported. Like the government, the report by the European Union Committee of the Lords, backs a euro zone banking union in principle to help stabilise the sector, but it stressed the need to get key details right. Finance ministers from all 27 EU states will try to thrash out a deal on the banking union on Wednesday for EU leaders to endorse at a summit on Thursday and Friday.

US and UK regulators will unveil the first cross-border plans to deal with failing global banks on Monday, outlining proposals to force shareholders and creditors on both sides of the Atlantic to take losses and to ensure sufficient capital exists in the banks’ headquarters to protect taxpayers. Writing in the Financial Times, Martin Gruenberg, chairman of the US Federal Deposit Insurance Corporation, and Paul Tucker, deputy governor of the Bank of England, say this represents the first concrete steps to end the “too big to fail” problem of large international banks.

UK Coal, Britain's biggest remaining coal miner, said it had avoided an imminent debt default and the closure of operations after completing a major debt restructuring deal with shareholders. But the company, which on Monday changed its name to Coalfield Resources, warned that some mines may need to close unless they lowered costs which rose by over a third between 2005 and 2010. "If (operators) run these mines well, they've got a future for the next decade.

The billionaire Barclay brothers, who are battling property developer Patrick McKillen for control of three London luxury hotels, have made repeated bids to buy his €300 million in personal debt held by Irish Bank Resolution Corporation, the Irish Times reported. Under the three-part offer, the brothers would pay €150 million for IBRC-held debts on Mr McKillen’s stake in the Berkeley, Connaught and Claridge’s hotels; £50 million for security on other debts, along with offering to return to IBRC 90 per cent of all other debts recovered from Mr McKillen.

There is no shortage of current candidates for the uncoveted title Sick Man of Europe: Greece, obviously, since it's in the midst of a deep depression and has just defaulted on its debts for a second time in a year via its deeply discounted debt buyback; Portugal and Ireland, since they are still subject to euro-zone bailouts; Spain, where unemployment is running at over 25%; Italy, whose economy has barely grown for 20 years and whose dysfunctional politics have returned to center stage now that former prime minister Silvio Berlusconi has withdrawn his party's support for Mario Monti's govern

By the time voters next go to the polls in 2015, the number of higher-rate taxpayers in the United Kingdom will have doubled in 20 years, following chancellor of the exchequer George Osborne’s budget changes on Wednesday, the Irish Times reported. An extra million people will have been dragged into the 40p rate by 2015 because of Mr Osborne’s decision to increase income tax thresholds by just 1 percentage point, the respected Institute of Fiscal Studies declared – bringing the total to five million.

Welfare benefits are to be squeezed, teachers forced to accept performance-related pay and half a million people will be dragged into the higher tax bracket under tax and spending changes announced in London yesterday, the Irish Times reported. Welfare benefits will rise by just 1 per cent for each of the next three years, while housing and child benefits will rise by the same for two years, said chancellor of the exchequer George Osborne. He added that those on benefits could not be immune from pain.

Much to the chagrin of the eurozone, Britain’s top industry prospers from serving a currency union the UK will not join. One senior EU official said “keeping an amicable distance is not an option”; financial services is the sector most entwined with the single currency and its nascent banking union, the Financial Times reported. The City’s golden ticket is the EU single market, a grand and unfinished scheme to eliminate barriers to the flow of capital, people and goods. During the 1980s and 1990s, the Square Mile blossomed as majority rule in the EU prised open continental markets.

The U.K. tax authority needs to aggressively pursue multinational firms that avoid paying corporation tax and prosecute offending companies, a parliamentary committee said Monday, The Wall Street Journal reported. In a report on corporate tax avoidance, the Public Accounts Committee said Her Majesty's Revenue and Customs, or HMRC, lacked determination to stop large international companies avoiding tax and was also too lenient.